Cities can cost effectively start their own utilities • Hacker News Board

Re: Cities can cost effectively start their own utilities

#81

Post by fooker » Sat, Feb 08, 2025, 9:14 PM UTC

jeffbee wrote: post #75

hypothesis wrote: post #72

Earlier quoted context omitted.

Eh, but we should not leave people without basics of civilization. Yes, it’s a subsidy, but benefits outweigh hoarding of wealth.

But we wouldn't have been "leaving" anyone. All this garbage was built in the 1970s because we incentivized it with subsidized roads and utilities. If we hadn't established those subsidies, all of these people would have lived in the established towns of Jackson or Ione, upon which they are totally dependent anyway.

> all of these people would have lived in the established towns

And I assume your food would be conjured magically?

Re: Cities can cost effectively start their own utilities

#82

Post by chasd00 » Sat, Feb 08, 2025, 9:14 PM UTC

jeffbee wrote: post #69

jncfhnb wrote: post #48

Earlier quoted context omitted.

No, their argument is sound. It’s just missing the point of utilities. They’re saying that the cost of providing electricity to the cities, where everything is densely located and there are fewer trees and fewer overhead lines needing under grounding is lower so they should charge less to city consumers. They imply that the bulk of the cost is delivering power to the richer consumers further out because there’s a lot…

Maybe, but it's also clear that rural electrification was a huge error. People should live in clusters of at least a handful of structures where it's practical and affordable to provision electric lines (and telecommunications), or they should be off the grid altogether. What we built in the 20th century was the worst possible thing: mile after mile of transmission and distribution equipment serving dispersed houses…

Who cares about the way things should be when it comes to utilities. There’s no feasible way you’re going to cut power to rural communities and people. Deal with it.

Re: Cities can cost effectively start their own utilities

#83

Post by chasd00 » Sat, Feb 08, 2025, 9:20 PM UTC

bitmasher9 wrote: post #50

This is absolutely a no-brainer for municipalities. The private companies are charging a premium that they return to shareholders and give to executives. Municipalities have excellent access to credit at rates significantly lower than the premium charged by utility companies. The residents get cheaper access and more influence in how the utility is ran. The number of people that pay for-profit companies for natural g…

City municipalities aren’t exactly staffed with the sharpest knives in the drawer. Few have the ability to manage the basics of street maintenance let alone stand something up like a utility. A fool and their money are soon separated, color me skeptical.

Re: Cities can cost effectively start their own utilities

#84

Post by kelseyfrog » Sat, Feb 08, 2025, 9:20 PM UTC

Of course it's cost effective for cities to start their own utilities, the economies of scale work in favor of urban and suburban electrification and maintenance.

What isn't effective is electrification and maintenance of low density regions although power monopolies like PG&E are required to provide service. The urban and suburban customers are effectively subsidizing the cost of transmission and maintenance for rural customers.

PG&E doesn't want their most profitable customer base[cities] to have public utilities because if enough do, their company becomes unprofitable and implodes.

This is exactly the reason we should do it.

Re: Cities can cost effectively start their own utilities

#85

Post by Nimitz14 » Sat, Feb 08, 2025, 9:22 PM UTC

jeffbee wrote: post #69

jncfhnb wrote: post #48

Earlier quoted context omitted.

No, their argument is sound. It’s just missing the point of utilities. They’re saying that the cost of providing electricity to the cities, where everything is densely located and there are fewer trees and fewer overhead lines needing under grounding is lower so they should charge less to city consumers. They imply that the bulk of the cost is delivering power to the richer consumers further out because there’s a lot…

Maybe, but it's also clear that rural electrification was a huge error. People should live in clusters of at least a handful of structures where it's practical and affordable to provision electric lines (and telecommunications), or they should be off the grid altogether. What we built in the 20th century was the worst possible thing: mile after mile of transmission and distribution equipment serving dispersed houses…

Interesting perspective. I guess even in very rural areas it would have pushed people to build villages. On the other hand people already were living far apart and lack of electricity meant they had to do massively more work. LBJ's biography has a section on this, explaining that life on west texas farms was incredibly hard without electricity (and as congressman LBJ worked very hard to expand that to rural people).

Re: Cities can cost effectively start their own utilities

#86

Post by rmason » Sat, Feb 08, 2025, 9:22 PM UTC

I used to live in a small town in Michigan which had city provided power using a dam. It was inexpensive and highly reliable. But every couple of years the big power company in the state would try and get the city to sell them the utility.

After I moved a city council for whatever reason ended up selling. As a result the cost of electricity immediately doubled and power outages occurred regularly due to reduced maintenance. I don't know what they spent the money on that they received but it was a very poor decision that I have to believe they regret.

Re: Cities can cost effectively start their own utilities

#87

Post by aqueueaqueue » Sat, Feb 08, 2025, 9:22 PM UTC

payne92 wrote: post #59

> It costs a lot of money to deliver power to rural customers Utilities (generally) have a universal service obligation. If someone can cherry-pick just the denser areas with lower distribution costs, of course they could "undercut" the utility with the requirement to serve everyone. (I'm not saying that PG&E couldn't be better managed. I'm saying that there's a much, much deeper policy issue at stake here.)

They made the point that this is the plan. Encourage people to live in cities.

Re: Cities can cost effectively start their own utilities

#88

Post by aqueueaqueue » Sat, Feb 08, 2025, 9:22 PM UTC

llamaimperative wrote: post #76

payne92 wrote: post #59

> It costs a lot of money to deliver power to rural customers Utilities (generally) have a universal service obligation. If someone can cherry-pick just the denser areas with lower distribution costs, of course they could "undercut" the utility with the requirement to serve everyone. (I'm not saying that PG&E couldn't be better managed. I'm saying that there's a much, much deeper policy issue at stake here.)

Land Value Tax solves this

How so?

Re: Cities can cost effectively start their own utilities

#89

Post by UncleEntity » Sat, Feb 08, 2025, 9:26 PM UTC

kelseyfrog wrote: post #84

Of course it's cost effective for cities to start their own utilities, the economies of scale work in favor of urban and suburban electrification and maintenance. What isn't effective is electrification and maintenance of low density regions although power monopolies like PG&E are required to provide service. The urban and suburban customers are effectively subsidizing the cost of transmission and maintenance for rur…

Sure, PG&E implodes but then who manages Diablo Canyon and who delivers electricity to the unprofitable rural areas?

I left California last century but seem to recall the PUC(?) has a pretty tight reign on what PG&E does and doesn't do.

Re: Cities can cost effectively start their own utilities

#90

Post by dv_dt » Sat, Feb 08, 2025, 9:27 PM UTC

Aurornis wrote: post #46

The author estimates that electricity prices would be reduced by up to 33% (from $0.45 blended rate to $0.30), but PG&E’s profit margins are only 11%. That’s a good hint that this hypothetical is missing some important details The article hedges against someone pointing this out by admitting that Walnut Creek is an unusually optimistic location and that PG&E is also recognizing large expenses related to ongoing infra…

Profit margins don't reflect how efficiently they manage costs. It could as easily be the case the PG&E mismanages resources and costs more to deliver the same power.